Triangle mortgage rates stay steady after rate cut

The Federal Reserve cut rates for the second time in 2025, yet mortgage rates will likely remain where they are for the foreseeable future. Despite economic uncertainty, Trent Olson, vice president and mortgage senior loan officer for TowneBank Mortgage said potential home buyers in the area can find opportunities now rather than waiting for rates to drop further. Triangle mortgage rates are staying steady.

“A lot of buyers are saying, ‘Well, I’m going to wait for interest rates to drop before I purchase,’ Olson said. “Well, it happened. We’re in the low sixes for conventional. And we’re below 6 percent for government loans. If anyone is waiting for another interest rate to drop, it’s not going to get much lower than we already are.”

Olson said the key to purchasing a home in the current climate is to understand the current market. Also, watch for patterns and think strategically about a mortgage as a bigger investment.

Olson explained that understanding the 10-year Treasury bond yield is key to understanding mortgage rates. “That’s where mortgage rates are derived from,” he said. “There’s a holding line in the 10-year Treasury — it’s 3.87 percent. For us to really see another big drop in interest rates, we need to get below 3.87.”

Despite the Federal Reserve rate cuts, the 10-year Treasury rate remains largely unmoved, remaining slightly above 4 percent. “Before the [September] Fed meeting, we hit right at 4 percent and rates hit 6 percent,” he said. Olson noted the status of rates has followed a trend over a two- to three-year period. “If we take history and look at it, the same thing happened. Before the Fed meeting in September, rates were dropping, and then after the September Fed meeting, rates went back up for the rest of the year. It happened two years in a row; now three years in a row.”

As the real estate market enters the slower winter season, Olson said mortgage experts expect rate cuts to slow as well. “People kind of take off for the rest of the year, coming into November and December,” he explained. With mortgage rates staying around 6 percent through the end of 2025, he said it may make some buyers take a pause before proceeding on a purchase. However, that may not be the wisest choice for some buyers.

Despite a traditionally slower time in real estate due to cooler weather and holidays, Olson said it doesn’t change the fact that people are still moving to the region.

“September was a big month; there was a ton of activity,” he said. TowneBank Mortgage had some of its highest numbers in recent years for people locking in rates, he explained. However, Olson added that some potential buyers chose not to purchase a home because of economic uncertainty, which has begun to stabilize the market.

“Thirty to sixty days on the market is the norm again,” he explained of the Triangle real estate market. “If you’re not mentally ready and you don’t feel comfortable, you’re never going to purchase. For those who are mentally ready, you can still negotiate, get a lower sales price, and get your closing costs covered. It’s a great time to go out there and purchase, because you can get the deal and get it on your terms.”

Olson said he expects the current mortgage rate to remain in place for at least six more months. “If you’re ready to buy, don’t wait for interest rates to get lower,” he said. “Don’t try to time the market. Get in there now. If you find a house you love, go get it.”

Olson said he and his team at TowneBank Mortgage act as financial advisors to their clients. They typically recommend focusing less on mortgage rates and more on tackling the debt that might put homeownership out of reach for many, as well as using today’s circumstances to sweeten the deal.

“You need to eliminate your credit card debt,” he said, which is highly important. In addition, he said it’s important to work with the right team to help you get the confidence to know you’re a good buyer. “They need to talk to the right people, where they’re giving them the correct information. If they just get a preapproval letter and they don’t quite know where they stand, they’re going to nitpick and say, ‘Well, this home is a little bit too much,’ or ‘I can’t go $10,000 higher.’  The better they go into it knowing that they’re in a good spot, the better off they are going to be.”

Olson added that it’s part of his job to explain to a buyer the bigger financial picture of buying.

“Part of my preapproval questions is, ‘What do you want your monthly payment to be?” he said. ‘What sort of homes are you looking at, and what area do you want to end up in? Because if they’re like, ‘I want to be on the west side of Raleigh,” you know, in Cary or something of that nature, and they have a $300,000 price point, I’m like, ‘Good luck. You’re not going to find anything.’”

Likewise, he said that sometimes living within a city’s limits versus further out in a county can increase costs significantly. That’s due to an increase in taxes. “Their payment could be $200 different, depending upon whether they’re in city limits or not, and depending on the home.”

He also said he wants to ensure the buyer’s real estate agent is in constant communication with him during the process. “That teamwork that comes with the agent and the loan officer… we’re not trying to influence them, we’re just trying to say, ‘Here’s your reality,’” he said.

Olson said that as the economy shifts and changes, potential buyers should work hard to reduce debt to get the most success out of a purchase.

“I don’t know what’s going to happen in the short term,” he said. “So many things, just in the next couple of weeks, could happen interest rate-wise. It’s a month-by-month — sometimes a week-by-week — case.”

The key, he explained, is to get comfortable with the payment you need to make today. “You’ve got to be comfortable where it is right now,” he said.